A Transfers Machines Valued at $170,000 (Basis = $150,000)along with $30,000

question 54

Multiple Choice

A transfers machines valued at $170,000 (basis = $150,000) along with $30,000 cash to AB Corporation and B transfers real property valued at $320,000 (basis = $310,000) to the corporation.A receives 40 percent of the outstanding stock and B receives 60 percent.B also receives $20,000 from the corporation.What is A's basis for his AB stock?

• A)$180,000
• B) $170,000
• C)$160,000
• D)$150,000
• E)None of the above

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Definitions:

Early Majority

A term used in the diffusion of innovations theory to describe the first significant segment of the population to adopt a new product or innovation after the early adopters.

Crossed The Chasm

A concept describing the transition of a technology product from early adoption to widespread acceptance and use in the mainstream market.

Bottom-up Analysis

An approach that starts with specific details and flows upwards to identify broader trends and patterns.

Top-down Analysis

An approach that starts with the broader economy or market before analyzing specific sectors or companies.